Revealed: World’s top 10 most and least expensive cities in 2018

Singapore has retained its title as the world’s most expensive city for the fifth consecutive year in 2018, according to latest worldwide cost of living survey issued by the Economist Intelligence Unit.

The top 10 cities on the index saw several cities from Asia including Hong Kong and Seoul. European cities also dominated the list.

Meanwhile Syria’s capital, Damascus ranked as the cheapest city worldwide, having dropped by 14 places in the past 12 months. It is followed by Caracas, which saw major currency devaluation. Three Indian cities also featured on the list.

The index looked at the cost of living across 133 cities worldwide by comparing 400 individual prices across 160 products and services. These include food, drink, clothing, household supplies and personal care items, home rents, transport, utility bills, private schools, domestic help and recreational costs.

Overall, the report found that deflation and currency devaluations were prominent factors in determining the cost of living, with many cities moving down the ranking owing to currency weakness or falling local prices.

“Both prices and a number of currencies rallied during 2017, and although inflation in many cities has remained moderate, the impact is reflected in the average cost of living,” it said.

On average, the global cost of living has risen to 74 per cent, up slightly from 73 per cent last year. This remains significantly lower than five years ago, when the average cost of living index across the cities surveyed was 85.5 per cent.

Meanwhile, as Damascus and Caracas show, a growing number of locations are becoming cheaper because of the impact of political or economic disruption, the report said.

“Instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location. This means that there is a considerable element of risk in some of the world’s cheapest cities. Put simply, cheaper cities also tend to be less liveable,” it explained.

Looking ahead, there are already indications of further changes that are set to take place during the coming year, the report stated.

While the rate of economic growth has been strong, oil prices also rebounded in 2017 along with other commodity prices.

“Equally, 2018 could see fallout from a number of political and economic shocks taking deeper effect,” the report said. “Instability and conflict around the world could continue to fuel localised, shortage-driven inflation, which would have an impact on the cost of living in certain cities.

“With emerging economies supplying much of the wage and demand growth, it seems likely that these locations will become relatively more expensive as economic growth and commodity prices recover. However, price convergence of this kind is very much a long-term trend, and in the short and medium term the capacity for economic shocks and currency swings can make a location very expensive or very cheap very quickly,” it added.

Top 10 Most Expensive Cities in the World
(All the cities are compared with a base city of New York, which has an index set at 100)

1. Singapore
Country: Singapore
Index score: 116
Rank movement: 0

2. Paris
Country: France
Index score: 112
Rank movement: 5

2. Zurich (shared ranking)
Country: Switzerland
Index score: 112
Rank movement: 1

4. Hong Kong
Country: Hong Kong
Index score: 111
Rank movement: -1

5. Oslo
Country: Norway
Index score: 107
Rank movement: 6

6. Geneva
Country: Switzerland
Index score: 106
Rank movement: 1

6. Seoul (shared ranking)
Country: South Korea
Index score: 106
Rank movement: 0

8. Copenhagen
Country: Denmark
Index score: 105
Rank movement: 1

9. Tel Aviv
Country: Israel
Index score: 103
Rank movement: 2

10. Sydney
Country: Australia
Index score: 102
Rank movement: 4

Top 10 Cheapest Cities in the World
(All the cities are compared with a base city of New York, which has an index set at 100)

1. Damascus
Country: Syria
Index score: 26
Rank movement: -14

2. Caracas
Country: Venezuela
Index score: 33
Rank movement: -13

3. Almaty
Country: Kazakhstan
Index score: 38
Rank movement: 2

4. Lagos
Country: Nigeria
Index score: 40
Rank movement: 2

5. Bangalore
Country: India
Index score: 44
Rank movement: 2

6. Karachi
Country: Pakistan
Index score: 46
Rank movement: 3

6. Algiers (shared ranking)
Country: Algeria
Index score: 46
Rank movement: 0

8. Chennai
Country: India
Index score: 47
Rank movement: 1

9. Bucharest
Country: Romania
Index score: 48
Rank movement: 0

9. New Delhi (shared ranking)
Country: India
Index score: 48
Rank movement: 0